Notice2023-00119
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 9, Section 13
Primary source
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Published
January 9, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 5 (Monday, January 9, 2023)</title>
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[Federal Register Volume 88, Number 5 (Monday, January 9, 2023)]
[Notices]
[Pages 1306-1307]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-00119]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 96599; File No. SR-Phlx-2022-50]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Options 9,
Section 13
January 3, 2023.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 23, 2022, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Options 9, Section 13, Position
Limits.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rules">https://listingcenter.nasdaq.com/rulebook/phlx/rules</a>, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Options 9, Section 13(a) related to
Position Limits. Specifically, the Exchange proposes to remove rule
text which provides, ``Standard and Poor's Depositary Receipts
(``SPDRs''), which shall have no position limits.'' Today, the position
limit for SPDR[supreg] S&P 500[supreg] ETF Trust (``SPY'') is 3,600,000
contracts on the same side of the market, as reflected within Options
9, Section 13(a).
In 2018, Phlx filed a rule change which amended the position limits
for SPY.\3\ Previously, SPY was subject to a pilot program that
provided no position limits on options overlying SPY.\4\ The pilot
program, which was set to expire on July 12, 2018, was terminated and,
in lieu of extending the SPY Pilot Program for another year, the
Exchange established position and exercise limits for options on SPY of
1,800,000 contracts with such change becoming operative on July 12,
2018.\5\ Subsequently, the SPY position and exercise limits were
amended from 1,800,000 to 3,600,000.\6\
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\3\ See Securities Exchange Act Release No. 83412 (June 12,
2018), 83 FR 28298 (June 18, 2018) (SR-Phlx-2018-44) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Rule 1001, Entitled ``Position Limits'').
\4\ Id.
\5\ Id.
\6\ See Securities Exchange Act Release No. 89153 (June 25,
2020), 85 FR 39619 (July 1, 2020) (SR-Phlx-2020-30) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Options 9, Section 13 To Increase the Position Limits for Options on
Certain Exchange-Traded Funds).
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In 2018 \7\ and 2020,\8\ the Exchange proposed to remove rule text
from then Rule 1001 (now Options 9, Section 13) \9\ regarding the
aforementioned pilot program, but inadvertently did not remove the
sentence setting no position limits when the Exchange added the new SPY
position limits. At this time, the Exchange proposes to remove the
sentence which was eliminated with the 2018 Rule Change so that there
is no confusion that the SPY limits are 3,600,000 contracts on the same
side of the market, as currently reflected in Options 9, Section 13(a).
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\7\ See note 4 above.
\8\ See note 7 above.
\9\ See Securities Exchange Act Release No. 88213 (February 14,
2020), 85 FR 9859 (February 20, 2020) (SR-Phlx-2020-03) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To
Relocate Rules From Its Current Rulebook Into Its New Rulebook
Shell).
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Finally, the Exchange proposes a technical amendment to remove a
stray open parenthesis within Options 9, Section 13(a).
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\10\ 15 U.S.C. 78f(b)
\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that correcting the rule text within Options
9, Section 13(a) by removing the rule text stating that SPY has no
position limits will protect investors and the public interest by
removing confusing and incorrect rule text. Also, removing inadvertent
and conflicting rule text regarding the SPY position limits, which
applied to an expired pilot program, will make clear that the current
SPY position limits are 3,600,000 contracts on the same side of the
market.
B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
[[Page 1307]]
The Exchange believes that correcting the rule text within Options
9, Section 13(a) by removing the rule text stating that SPY has no
position limits will protect investors and the public interest by
removing confusing and incorrect rule text. Also, removing inadvertent
and conflicting rule text regarding the SPY position limits, which
applied to an expired pilot program, will make clear that the current
SPY position limits are 3,600,000 contracts on the same side of the
market.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) \13\ thereunder.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative upon filing. The Exchange states that
its proposal to remove the incorrect rule text stating that SPY has no
position limits will protect investors and the public interest by
making clear that the current SPY position limits are 3,600,000
contracts on the same side of the market. The Commission believes that
waiver of the 30-day operative delay is consistent with the protection
of investors and the public interest because the proposal will
eliminate outdated and potentially confusing rule text, thereby
enhancing the clarity of the Exchange's rule, and the proposal also
does not raise any new or novel issues. Therefore, the Commission
hereby waives the operative delay and designates the proposal operative
upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#bccec9d0d991dfd3d1d1d9d2c8cffccfd9df92dbd3ca"><span class="__cf_email__" data-cfemail="ee9c9b828bc38d8183838b809a9dae9d8b8dc0898198">[email protected]</span></a>. Please include
File Number SR-Phlx-2022-50 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-Phlx-2022-50. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of the Exchange. All comments received
will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-Phlx-2022-50 and should be submitted on
or before January 30, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood.
Assistant Secretary.
[FR Doc. 2023-00119 Filed 1-6-23; 8:45 am]
BILLING CODE 8011-01-P
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